**GBP/USD Price Forecast: Pound at 1.34, Can the Pound Finally Break 1.35?**
*By Trading News Staff (as referenced from tradingnews.com)*
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The British pound (GBP) has seen considerable volatility against the US dollar (USD) in recent weeks, with the GBP/USD pair hovering around the 1.34 mark. As the forex markets search for direction amidst shifting economic indicators, traders and investors are closely watching for any signals that the pound could finally break past the critical 1.35 resistance level. In this in-depth forecast, we examine the current state of the GBP/USD pair, analyze the key drivers behind recent price movements, and discuss what could propel the pound above 1.35.
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## GBP/USD Recent Performance Overview
The GBP/USD currency pair has experienced a series of ups and downs through 2024 as traders reconcile diverging central bank policies, global economic uncertainties, and domestic data from both the UK and the US. The pound started the year on a positive note, capitalizing on what appeared to be a softer stance from the Federal Reserve regarding interest rate hikes. This momentum slowed, however, as persistent US inflation numbers and hawkish Fed commentary steadied the dollar.
In the past weeks:
– GBP/USD fluctuated between 1.33 and 1.35, finding both support and resistance at these psychological levels.
– The Bank of England (BoE) has kept market participants attentive, as its monetary policy statements emphasize inflation containment, even as economic growth shows mixed signals.
– US economic data has delivered surprises, with moments of dollar strength on the back of robust non-farm payroll numbers and sticky CPI inflation, but periods of softness when growth appears to be faltering.
As of early June 2024, the pound is consolidating near 1.34, oscillating in response to alternating bullish and bearish catalysts from both sides of the Atlantic.
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## Technical Analysis: Will the Pound Surpass 1.35?
Technical indicators remain a key tool for traders attempting to decipher the pair’s next moves. At present, GBP/USD is trading within a tight range, bounded by well-defined support and resistance levels.
### Key Technical Levels:
– **Immediate resistance:** 1.3450 – 1.3500
– **Major resistance:** 1.3550 – 1.3600
– **Immediate support:** 1.3350
– **Major support:** 1.3250
Moving averages present a mixed outlook:
– The 50-period moving average is trending upwards, suggesting a mild bullish bias in the short term.
– The 100-period and 200-period moving averages are flattening, signaling indecision and potential for a consolidation phase.
Momentum oscillators like the Relative Strength Index (RSI) currently sit around the neutral 50 mark, indicating a balance between buyers and sellers. However, a sustained move above 60 on the RSI could point to renewed bullish momentum.
For the pair to convincingly break above 1.35, technical analysts highlight the need for:
– A daily close above 1.3500, ideally accompanied by strong trading volume.
– A breakout confirmed by a golden cross of shorter-term moving averages above longer-term moving averages.
– An uptick in momentum indicators, with RSI moving toward overbought levels only if supported by fundamentals.
Should the pound fail to gather sufficient bullish momentum, a reversal toward the lower end of its recent range remains possible.
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## Fundamental Factors: What Drives GBP/USD?
The GBP/USD exchange rate is influenced by several intertwined fundamental drivers. Currently, market sentiment fluctuates based on:
### 1. Divergent Monetary Policies
– **Bank of England (BoE):**
Governor Andrew Bailey and the BoE’s Monetary Policy Committee have sent mixed signals but maintain a cautious tightening bias. Though headline inflation has ticked lower, persistent services and wage inflation keep policymakers on their guard. Markets are
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